Russia has been seeking to increase its existing relations with African countries, and Afreximbank is now providing tremendous support in achieving this goal in the long term. The bank, with the task of transforming Russia's trade with Africa, organized an economic conference for more than 1,500 participants from June 20-22 in Moscow. The economic conference and other events between Russia and Africa in 2019 can be described as "the Year of Africa" in the Russian Federation.
The Afreximbank Annual Meetings included the Afreximbank Consultative Group Seminar and Meeting on Financing Trade and Export Development in Africa and special meetings between Russian and African business and political leaders to discuss trade, industrialization, export and implementation of joint investment projects.
Russia continues to strengthen its relationship with Africa because of multiple factors such as abundance of unexplored natural resources, improved business climate, rising average income and economic growth, Prime Minister Dmitry Medvedev said in his keynote address at the conference. He also pointed to Africa's growing appeal and demand for investors in high-tech telecommunications and other products that could establish a rapid commercial connection with Russia.
"All these things have already made Africa attractive for investment, not only in the production of industries but, what is of particular importance, in high technology and telecommunications," Medvedev said.
According to some estimates, about half of the planet's resource potential is in Africa, he argued that "we therefore need to use these resources more efficiently and at the same time promote cooperation in this sphere, as well as cooperation in other spheres ".
In addition to these factors, there is a great desire for mutual cooperation. "It is also important to have a sincere inner desire, and this sincere desire is present on the Russian side and on the side of the African states. We see this on different levels, including the highest levels of cooperation," Medvedev said. said.
Opening the conference, Foreign Minister Sergey Lavrov reminded conference participants that, while relying on the long accumulated experience of constructive partnership, Russia and Africa are moving with confidence along the way of the sweeping expansion of Russian-African ties .
According to the Foreign Minister, the long years of solid friendship that has been created give new impetus to cooperation in many spheres and provide the necessary conditions for the construction of trade, economic and investment exchanges as well as banking cooperation. encourage business communities to implement mutually beneficial projects in African countries.
These include the construction of the country's first nuclear power plant and the establishment of the Russian Industrial Zone in Egypt, as well as the projects being implemented in Africa by leading Russian companies such as Rosneft, Lukoil, Rosgeo, Gazprom, Alrosa, Vi. Holding, GPB Global Resources and Renova.
"Major projects are being implemented in Africa with direct financial support from Russia," he said assertively. "We can report the first achievements in this sphere." Mutual trade is growing – surpassed $ 20 billion last year – and is becoming more diversified. . "I am confident that the cooperation with Afreximbank, to which the Russian Export Center (REC) has joined as a shareholder, will help to promote long-term business and economic relations between Russian companies and their African partners."
As expected, the REC anticipates that the volume of Russian-African trade relations will double in the next 3-4 years. "The Russian Export Center maintains a close partnership with Afreximbank and has already entered into the first deals we are jointly implementing on the African continent. We intend to increase volumes and anticipate the volume of trade ties between Russia and Africa in the next three years. for four years doubling, "said the head of the Russian Export Center (REC), Andrei Slepnev.
"It is clear that the Russian Export Center sees the African region as an important area for promoting Russian exports of non-commodities. Our goal is to use today's positive market environment to open up access to African markets to the largest number our geography, "he argued.
The African continent currently has enormous potential as a sales market. Many African countries are undertaking economic reforms, demand is growing for competitive, high-quality products. Russian companies are interested in this niche and our products are already competitive in terms of price and quality.
The basic financial instruments to support trade between Russia and Africa could be direct loans to foreign buyers (including those secured by the borrower country's sovereign guarantee) and loans to banks of foreign buyers under insurance Exile, loans to sovereign borrowers, receivable from export earnings.
In 2018, for example, the volume of Russian products supported by exports to African countries reached US $ 2.47 billion. The main partners are Egypt, South Africa, Zambia, Morocco, Algeria, Nigeria and Kenya.
Adviser to the President of the Russian Federation, Anton Kobyakov, stressing the importance of multilateral cooperation between Russia and Africa: "The current situation in the world is such that we are witness to the formation of new centers of economic growth in Africa. There is no doubt that Russia's non-commodity exporters will benefit from cooperation with Africa in manufacturing, technology, finance, trade and investment. "
The President of Afreximbank and Chairman of the Board, Dr. Benedict Okey Oramah, presented the African Trade Report for 2019, an analytical survey of African trade. "As we gather in this historic city of Moscow, we will explore how we can shape the future of trade and how we can transform our continent," said Oramah. "Our collective efforts will impact the economic future and the well-being of Africans for the next generations."
In the report, particular attention was given to practical cooperation in the areas of finance, energy, mining, railway infrastructure, digital technologies, cyber security, health, education, food security in Africa.
In 2017, the Russian Export Center became the third largest shareholder of Afreximbank's financial institutions or organizations in Africa, allowing rapid acceleration of investment, trade and economic relations between Russia and African countries. He is active in mining projects in Zimbabwe and Sierra Leone and has expressed an interest in attracting Russian partners to implement projects in the oil industry in Africa.
Among the Russian-African foreign economic projects is the signing of a memorandum of cooperation between REC and the Joint Company Afromet (Vi Holding) on the full development of the Darwendale platinum field project in Zimbabwe signed during the President's visit. from Zimbabwe, Emmerson Mnangagwa, to the Russian Federation in January 2019.
According to separate reports, Russia has been developing a number of projects in cooperation with Afreximbank, including a project to send Russian ground transport and projects to finance construction and modernization projects for industrial infrastructures in Nigeria and Angola. At the end of 2018, REC, Russian Railways and Afreximbank signed a memorandum of cooperation. As a result, a trilateral working group was set up to study export and investment project issues in rail and related industries, as well as ways of financing projects and investments.
The latest description of Africa, which consists of 54 states, for many business experts and investors, is the last frontier. It is the last frontier because it has huge yet unexplored natural resources, all kinds of emerging business opportunities and ever-increasing consumer market due to population growth. Today, it has become a new field of business for global players.
These negative perceptions are deeply lingering between the political and business elite, the middle class, and the public about Russia. Over the last two decades, due to Russia's low enthusiasm, the lack of a coordinated comprehensive mechanism and slow delivery of investment commitments have been identified as the main factors affecting effective cooperation between Russia and Africa.
The London-based business research and consulting firm has published a new report on global players aimed at continuing to expand business and economic engagement across Africa. The publication became largely important as Russia, with its recognized global status, and among the BRICS (Brazil, Russia, India, China and South Africa) dominated the headlines it played a less visible role in Sub-Saharan Africa after the collapse of the Soviet Union.
The Russian Export Center, as a state non-state support institution providing Russian exporters with a wide range of financial and non-financial support, is also working on several projects with Afreximbank in various African regions. Afreximbank was founded in 1993 in Abuja, Nigeria, with the authorized capital of $ 5 billion. The Bank's main objectives are the development of trade between African and overseas countries. The seat of the banks is located in Cairo, Egypt. * Kester Kenn Klomegah often writes about Russia, Africa and the BRICS.